Highlights for the quarter ended June 30, 2016, compared sequentially to the quarter ended March 27, 2016:

Sales of $27.8 million, an increase of 5.0%;

Adjusted EBITDA of $3.4 million, inline with the prior sequential quarter; and

Net loss increased to $0.8 million.

Fiscal Year Fourth Quarter Results

Fiscal year fourth quarter 2016 revenue was $27.8 million, a 5.0% increase sequentially, compared to the third fiscal quarter of 2016. The increase was driven by continued momentum from our new sales efforts.

Adjusted EBITDA for the fiscal year fourth quarter remained generally inline with the prior sequential period at $3.4 million, a product of increased costs primarily attributable to the launch of new product programs.

Net loss for the fiscal year fourth quarter increased from the prior sequential period to $0.8 million, a product of increased income taxes associated with the existence of a deferred tax asset valuation allowance.

Management Commentary

Jason Young, CEO, commented, "Our new sales culture, combined with our differentiated approach, resulted in continued sequential sales improvement through the balance of fiscal year 2016. While margins in the fourth quarter were somewhat muted, this was largely due to the launch of new production parts, increased sales and marketing efforts, and a higher tooling mix. While these initiatives impacted quarterly results, we believe all should help drive future revenue and margin growth as these new programs ramp to full production. Overall, fiscal year 2016 was a transitionary year for us, as we initiated the unification of our global sales and cross-selling efforts. Given the momentum we built through the year, we remain optimistic about the future prospects of delivering our full solution, fast manufacturing approach to customers. We also continue to see great opportunities to apply our metal 3D printing solutions to new applications, by finding cheaper, faster and superior technical solutions to legacy manufactured precision parts. We think this is a trend that can have a big impact on precision manufacturing in the coming years."

GAAP to Non-GAAP Reconciliation

EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Earnings and Adjusted Earnings Per Share are non-GAAP financial measures. EBITDA Margin and Adjusted EBITDA Margin are calculated by dividing EBITDA and Adjusted EBITDA, respectively, by sales. The Company has provided non-GAAP financial information to provide additional, meaningful comparisons of current results to prior periods' results by excluding items that the Company does not believe are representative or indicative of its results of operations. Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

The reconciliation to GAAP is as follows (dollars in thousands):

June 30,

March 27,

December 27,

September 27,

For the three months ended:

2016

2016

2015

2015

Net Loss

$

(834

)

$

(337

)

$

(594

)

$

(441

)

Interest Expense, Net

1,077

1,107

1,126

1,141

Income Taxes

647

(8

)

(132

)

(426

)

Depreciation and Amortization

2,364

2,415

2,388

2,362

EBITDA

$

3,254

$

3,177

$

2,788

$

2,636

EBITDA Margin

11.7

%

12.0

%

11.1

%

10.8

%

Share-Based Compensation Expense

39

138

—

—

Reorganization/Transaction Expenses

134

90

563

9

Adjusted EBITDA

$

3,427

$

3,405

$

3,351

$

2,645

Adjusted EBITDA Margin

12.3

%

12.8

%

13.4

%

10.8

%

Net Loss

$

(834

)

$

(337

)

$

(594

)

$

(441

)

Share-Based Compensation Expense

39

138

—

—

Reorganization/Transaction Expenses

134

90

563

9

Adjusted Earnings

$

(661

)

$

(109

)

$

(31

)

$

(432

)

Adjusted Earnings Per Share

$

(0.04

)

$

(0.01

)

$

(0.00

)

$

(0.02

)

Weighted Average Common Shares Outstanding

18,123,883

18,123,883

18,123,883

18,123,883

EBITDA excludes interest expense, net and income taxes because these items are associated with our capitalization and tax structures. EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which may not be indicative of future capital expenditure requirements.

The Company defines Adjusted EBITDA as EBITDA excluding the impact of share-based compensation expense and reorganization/transaction expenses, which is in accordance with the Company's bank debt covenants. Shared-based compensation expense relates to the Company's grant of stock options to employees. Reorganization expenses are primarily labor and labor related costs associated with the termination of employees and inventory write-downs as allowed by the Company's bank debt covenants. Transaction expenses are primarily professional fees related to the refinancing of debt.

ARC Group Worldwide is a global advanced manufacturing and 3D printing service provider focused on accelerating speed to market for its customers. ARC utilizes technology to improve automation in manufacturing through robotics, software and process automation, as well as lean manufacturing to improve efficiency. ARC provides a holistic set of precision manufacturing solutions, from design and prototyping through full run production. These solutions include metal injection molding, plastic and metal 3D printing, metal stamping, plastic injection molding, clean room injection molding, rapid tooling, thixomolding, antennas, hermetic seals, and flanges and forges.

Forward Looking Statements

This press release may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995, which are based on ARC's current expectations, estimates and projections about future events. These include, but are not limited to, statements, if any, regarding business plans, pro-forma statements and financial projections, ARC's ability to expand its services and realize growth. These statements are not historical facts or guarantees of future performance, events or results. Such statements involve potential risks and uncertainties, and the general effects of financial, economic, and regulatory conditions affecting our industries. Accordingly, actual results may differ materially. ARC does not have any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information on risks and uncertainties that could affect ARC's business, financial condition and results of operations, readers are encouraged to review Item 1A. - Risk Factors and all other disclosures appearing in ARC's Form 10-K for the fiscal year ended June 30, 2016, as well as other documents ARC files from time to time with the Securities and Exchange Commission.